That goal will remain elusive until we recognize that the wealthy are essentially similar to the rest of us. They just have a lot more money.
Luxury markets are already important, and with inequality poised to grow further, these markets will become ever more so. Those who fail to understand them cannot hope to understand what drives the world economy.
Each day, for instance, many of us consume espresso brews priced at what would be almost a week’s wages in other parts of the world. We’d be offended if someone described these purchases as attempts to display our wealth. And we’d be puzzled if someone said we’d buy even more lattes if our favorite cafe were to raise its prices. The coffee just tastes better, we’d say, and we’re willing to pay a premium for that.
The rich, of course, are willing to spend more, often a lot more, for products that deliver quality improvements they value. But few of them want to throw money away. In that respect, they’re like middle-income Americans, many of whom don’t feel especially prosperous these days. Yet relative both to current world standards and to living standards of the past, middle-income Americans are incredibly wealthy. And when viewed from the perspective of those standards, much of their current consumption is strikingly similar to that of today’s rich.
If they were merely chasing Veblen goods, the rich would be easily exploited by the purveyors of luxury items. Yet the markets for these goods are among the most bitterly contested, and not just because the stakes are so high. Thousands of wine producers spend small fortunes trying to achieve 96-point Robert Parker ratings, but very few get them.
According to Veblen Showing of wealth is less important than he thought. In his articles he says “the Rich buy luxury goods for several motives, even the ones showing up their wealth do find ways of doing that. Why buy an expensive good when you can show your riches just as effective with an equally expensive good that you actually like? To be sure, billionaires are often willing to spend enormous sums for beautiful things that can’t be duplicated at low cost. But almost none of them would want to buy more of something simply because its price had risen”.
The “Veblen goods” term was introduced by Thorstein Veblen, who interpreted what consumption by the rich is as an attempt to show up their wealth. “In his view, the lavish summer mansions of 19th-century industrialists in Newport, R.I., were valued less for their own sake than for the fact that they marked their owners as people of wealth and power”.
These has made our generation become what we aren’t, just because we want to make our peers see us in designer brands and all, the social norms of consumption are inclining every single time with the help of the media and advertisement we see, we tend to let them get to us and before we know what is going on we are already out with our credit card and within a click we have purchased the commodity. These are what the affluent ones usually violate, the law of demand. Which says as the price of goods geos up, the consumers buys less. however, these is opposite to the rich because they are someone who go after what its called the “Veblen goods” which is as price of the goods go up, the sales also go up.
How the conspicuous consumption has taken over our society, imagine someone buying a Mercedes Benz on financing just to off his wealth status and all, even though he has what it takes to get a Honda and pays it in full, but because he wants to let his other peers see him has a big guy or to make the ladies think of him has a big boy, he allows peer pressure to take over him. Meanwhile both the Honda and the Benz goes on the same road, same gas and all, just the luxury taste that makes it different
Conspicuous consumption has skyrocket these days because the consumer’s have enough of money, yet are they different from the other class like the middle class and all? Because the growth of income has deeply focused at the very top, luxury goods have become the prime drivers of economic activity around the world. To understand these goods, we must understand the motives of the customers they serve, and it’s here that many analysts have stumbled.
Also, was the factor that make an historical shift of middle-class women out of suburban neighbourhoods (where the neighbours were imitating and “keeping up with the Joneses” were the order of the day) and into hierarchical workplaces in which they were exposed much more frequently to people of higher economic status, and hence became more likely to pick up new consumption cues from such people.
Another factor is the way the role the media has played in passing on fascinating images of wealthy lifestyles to the targeted audience. there was a conspicuous change in the commercial media like television, magazines, etc. The media portray the expensive lifestyles as the social custom which people should aim. These was achievable because, during that time, there was rise in the volume of people that were spending with electronic media on a daily basis.
According to Schor, it is believed that there are factors that led to the new consumerism. One of which has to do with the shifting of income and wealth in recent decades. For some decades now in the US and other advanced countries have experience change towards greater inequality in terms of the shared income and wealth going to the top 20 percent of the population. This outcome of upward redeployment has increasingly enabled those at the top of the socio-economic ladder to engage in all manner of luxury spending and conspicuous consumption. In return, the rising consumption norms of this wealthy minority have affected the ways in which the great majority of people – the remaining 80 percent – look at the world and develop their own consumer aspirations.
According to Juliet Schor, in her article “The New Politics of Consumption” , which has to start with everyday life and its developments of consumption. These idea of development is called the “New Consumerism”, which means the upscaling of the lifestyle norms, the pervasiveness of conspicuous, status goods and the competition for acquiring them; and the growing disconnect between consumer desires and incomes. the basic idea is that, in general, people today are more aspiring towards luxury and affluence, as opposed to the old era in which achieving a comfortable and decent middle-class existence was the more common goal.
The concept of conspicuous consumption was first introduced by Thorstein Veblen in his 1899 book, “The Theory of the Leisure Class”. It is a term used to refer to the practice of consumers buying goods and services to publicly display wealth and income, rather than to cover their basic needs. This particular type of consumption is not new and has been part of the society for a long time, and mostly associated with the rich and wealthy with the aim to gain or maintain higher social status or esteem.